Maybe it is no wonder there are so many new student flats being built in Plymouth – the city has been revealed as the most profitable place to invest in purpose build accommodation for university types.

New data from specialist online buy-to-let agency yieldit has named Plymouth as the top location for landlords looking to invest in purpose built student flats anywhere in the UK.

According to yieldit’s available student properties, the city commands average NET yields of 7.24 per cent, beating all other areas in terms of profitability.

The data shows Plymouth’s student landlords receive, on average, a 2.47 per cent higher return than the lowest ranking city, Newcastle, which has a 4.77 per cent average NET yield.

The firm said the transaction is in line with Unite's strategy to “recycle” capital through the disposal of assets with “lower than average growth prospects” and reinvest into developments increasingly focusing on high and mid-ranked universities, which have the best long-term growth prospects.

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The sale came as Plymouth has been undergoing a splurge of student flat building, with three large blocks being completed in the past year and more on the way, while seeing a decline in student numbers prompting redundancies at the university.

Plymouth’s student flat splurge

Plymouth already has thousands of purpose-built student rooms in blocks across the city - and more are on the way.

In 2017, about 1,000 rooms, in skyscrapers such as the huge, 23-floor Beckley Point and nearby Mary Parker House, next to the former Eye Infirmary, came onto the market in Plymouth.

They added to the 5,243 purpose-built student block bed spaces already in the city at that time.

There are other buildings under construction in Plymouth and others which have been given planning consent. This is a summary:

Recently built:

Aspire

The six-storey, £4.5million Aspire block (above) opened in September 2017 and will house 79 students, in one-, two- and three-bed apartments, and sine shared-kitchen “demis”.

Every room is fitted out to a high standard and comes with a kitchen, bathroom, some of which even have baths, and a 32-inch TV.

Beckley Point

The £30.79million Beckley Point tower (above) is already housing students as the finishing touches are being put to the building.

The 505-bed student accommodation block, in the centre of Plymouth, will soon be fully completed after construction was delayed by months due to London’s devastating Grenfell Tower fire, in June 2017.

Buildings across the country had to change their external cladding after the disaster.

Mary Parker House

Construction finished in 2017 at Plymouth’s £7.8million Mary Parker House student block (main picture above), which comes with a laundry, gym and bike store – but no bar.

That’s because students are apparently shunning alcohol in favour of a healthier lifestyle.

The five-storey building, on the site of the demolished Eye Infirmary extension, has a gym and secure storage for 82 bikes.

The pile, built for developer Maple Grove and owner Eric Wright Group, has 165 bedrooms, a mix including 22 individual studios, with kitchens, and 143 single en-suite rooms grouped into flats

Crescent Point

Plymouth’s £16million Crescent Point (above) student flats towers appears to be ready – and rooms are already being snapped for the autumn 2018 term.

The double block, 13 and 10 storeys in height, were due to welcome students in September 2017 but construction was affected by the fallout from the Grenfell Tower fire disaster in London. In total there will be 348 beds.

Under construction:

Derrys

Construction teams have smashed three huge shafts inside the former Derrys department store as part of its £50million transformation into student flats and a hotel.

The specialist EHA Group is busy working on the 224,536sq ft block, in the city centre, aiming to have the new look building ready by 2019.

The building will house 500 students and a 110-bedroom Premier Inn hotel, itself a £9.5million investment.

North Hill Court

Work is starting on Plymouth’s latest block of student flats – a £3.5million development right next to the university campus.

Romford-based Hermes Great Estates (HGE) aims to have the North Hill Court block, in North Road East, built and ready for students to move into by September 2019, despite the city being, as it says, “oversupplied” with student accommodation.

The three storey building will contain 39 studios and one-bedroom apartments and it is intended to sell these leases for £79,950 and £90,950 respectively.

Planned:

Belgrave Snooker Club

Plymouth’s oldest cinema, dating from 1912, was put on sale in 2017 the year after permission was given to bulldoze the Belgrave Snooker Club and build a 43-bed student block.

The Pegasus Group on behalf of JMP Integrations Ltd said the proposals would enable the redevelopment of an empty building following its closure in 2015.

Drake Reservoir

Proposals for a new five-storey student block next to the city’s historic Drake reservoir were approved by city planners in 2017.

The designs for the 66-bed student block in North Hill, which will be targeted towards postgraduate international students, also include a unit for a café, shop or office.

There are also plans for a common room or study space on the ground and lower ground floors of the building.

Good Companions

Demolition crews moved onto the site of the former Good Companions pub in 2017 – ready to replace it with a 17-storey student tower.

Work was originally due to start in 2017 with the block ready for 267 students to arrive in September 2019.

Paul Scantlebury, co-founder of Burrington Estates, the firm behind the £20million scheme, said it could be one of the last student skyscrapers in the city centre.

Mayflower House

In 2016 permission was given for an 18-storey building housing almost 500 students on the corner of Armada Way and Mayflower Street, in the shadow of the Beckley point.

The building would follow the demolition of Mayflower House, a five-storey office building which was constructed in the 1950s.

Money Centre

A preliminary design for the site was put forward in 2017 by developers Pegasus Group which included a 600-bed student accommodation block, plus a 100-bed hotel, offices and retail units.

It would also see the reflective exterior revamped and brought into the 21st century to bring it up-to-date with the buildings alongside it.

The development was given planning consent in June 2018.

However, the yieldit research may be music to the ears of the new owners of the former Unite portfolio: Singapore Press Holdings.

Behind Plymouth in the yieldit rankings , student landlords in Leeds receive the highest returns at an average of 6.57 per cent, boosted by the University of Leeds’ status as one of the UK’s largest institutes of higher education with more than 34,000 students.

Following Leeds in the rankings is Sheffield with an average of 6.24 per cent and, in close succession, Liverpool at 6.23 per cent.

Both cities are considered vibrant student centres, each home to more than one university and thousands of students competing for accommodation.

Crescent Point welcomed students in September 2018 (Image: Penny Cross)

Making up the top five is Nottingham with a “respectable” average NET yield of 6.17 per cent.

Unsurprisingly, three of the top five locations for the highest student yields also feature in the Which? University Student Survey 2018 “all-rounder universities” category, yieldit said, with the University of Leeds, the University of Nottingham and the University of Sheffield each scoring highly across all categories.

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This indicates that, as expected, the popularity of higher-education institutions among students is one of the leading indicators of where good returns might be had, said yieldit,

Sitting in the middle of the table of results is Middlesbrough with average NET yields of 6.14 per cent, only marginally behind the likes of Liverpool and Sheffield. Having invested more than £270million in its award-winning campus, Teesside University continues to attract students from the UK and beyond, with students from over 100 countries having graduated from its courses.

Ryan Hughes, head of sales at yieldit, said: “Investment in purpose built student accommodation is an excellent way for buy-to-let investors to diversify and continues to offer excellent returns thanks to the world-class reputation of higher education institutions in the UK.”

He added: “Predictably the best performing areas are those which are the most popular among students looking for a comprehensive university experience, with everything from specialist courses to a fantastic nightlife.

“With that in mind we expect that other locations on the list will continue to climb in the profitability rankings as they invest further in their universities and campuses grow in size.”

The student flat money-making league table

Average NET yields of student accommodation according to yieldit’s available properties:

Plymouth – 7.24 per cent

Leeds – 6.57 per cent

Sheffield – 6.24 per cent

Liverpool – 6.23 per cent

Nottingham – 6.17 per cent

Middlesbrough – 6.14 per cent

Bolton – 5.97 per cent

Chester – 5.90 per cent

Glasgow – 5.84 per cent

Sunderland – 5.73 per cent

Newcastle – 4.77 per cent

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